Antitrust Investigations and Authors

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The term ‘antitrust’ is primarily used within the United States of America but has worldwide implications.

 

 

‘In the United States, antitrust laws are intended to stop large firms taking over their competitors, fixing prices with their competitors, or interfering with free competition in any way.’ (Collins Dictionary)

‘Preventing or controlling trusts or other monopolies and so promoting fair competition and business.’ (Unknown)

Currently, in Washington, Brussels and elsewhere, regulators and lawmakers are investigating whether Amazon, Apple, Facebook and Google have used their size and wealth to defeat competition and increase their market power. Though the business model and perceived antitrust issues are different for each company the overall concern is whether there is too much power within the hands of too few companies.

A brief overview of the issues for each company follows together with thoughts upon how these and/or potential resolutions may impact authors, especially independent (indie) ones.

Amazon

A primary consideration is whether the company is giving preference to its own brands over those of third party sellers. Apparently, as at the time of writing, it has one hundred and forty private labels. There is an accusation of it using sales statistics to target purchasers. An accusation it denies stating it only collects overall, not individual, sales information. It should be noted approximately fifty-eight percent of sales are for third party products, which it permits to be sold through its sites.

Another concern relates to its advertising business which was worth ten billion dollars last year. Though not directly stated there is an underlying intimation it is arm-twisting users to utilise its advertising facilities.

A solution some regulators have previously considered, and may still be looking at, is to break up the company including spinning off and rolling back some of its business and acquisitions.

Such a break up could have implications for authors because the book side of things, which is primarily where the company started, is in effect a separate company. Createspace, which many indie authors utilised for print editions of their books was closed down recently. Though never stated there is a likelihood this was due to them finding it unprofitable. Existing accounts and products were amalgamated into the Kindle environment. Now, with the volume of self-published, non-selling, books the company may consider draconian action should it be required to break up its business. Of course, at present this is all an unknown nevertheless, it is wise to be prepared just in case. Thankfully there are alternatives which it may be sensible for authors to start investigating.

Apple

The principle criticism relates to the company’s control of its App Store because of its strict management over which companies and products may appear in the store. (An app is a software application that may be downloaded onto a user’s electronic device.) An obvious response, and one Apple has made, is such control is necessary to ensure and maintain quality and to prevent fraud. An argument most will surely understand. However, the company has apparently set its future upon getting users to utilise and purchase its own apps rather than a rivals. Regulators are viewing this as detrimental to free, unbiased, trade.

Authors utilise various apps to create publicity and marketing material for their books. Consequently, any change that undermines quality or allows less scrupulous people to promote products as if they equate to Apple’s own quality ones, may result in users becoming vulnerable to poor quality or even fraudulent products. (Some cyber criminals use such downloadable software to install viruses etc.) There are also authors who utilise Apple’s book creation software. Again, allowing non-verified app options could lead to serious problems and/or poor quality end products.

Facebook

Anyone who keeps an eye on technical news will be aware the company has faced many ‘challenges’ over recent times. One , relating to unacceptable privacy practices, resulted in fines amounting to five billion dollars. At this level no one seems to speak of millions anymore.

A current, though it has actually been longterm, concern relates to the company’s ongoing acquisition of other social media sites: more than seventy over the last fifteen years. The most recent have been Instagram and WhatsApp. This practice is viewed by regulators as an inappropriate means by which the company retains and increases its dominance within social networking.

As yet, there is no clear indication of what, if any, action regulators may consider appropriate. Nevertheless, many, if not the majority, of authors utilise Facebook to interact with their fans and readers as well as to publicise and market their books and consequently need to keep an eye on the issue. Already, to comply with both user and regulatory wishes, many changes have been made which, though intended to improve user experience have occasionally been detrimental, or at least limiting, to author usage.

Google

In the past, now the distant past in most minds, in response to a search inquiry the site would direct the searcher to a few websites it considered may be able to answer the question posed. Now the company seeks to answer the majority of inquires itself and crowds search results with its own products and services. It has got so good that some surveys suggest over fifty percent of searchers find answers within the company’s own environment, without having to ever go elsewhere.

All, even competitors, acknowledge the speed with which the system provides responses however, many argue the company is abusing its dominance (Google deals with ninety percent of the world’s searches). The primary areas of concern are digital advertising and android reliant technology.

Apparently, the company gains most of its income from digital adverts and is the largest seller of digital advertising services. There is an argument that the company is forcing advertisers to use their advertising facilities if they wish to also utilise other Google owned services. Naturally, regulators see this as an area for concern.

It is also reckoned three out of every four smartphones rely upon Google’s android software and, as a result, the company requires its search engine to be placed front and centre. It is also understood the company requires many of its other apps be preinstalled. Again it may be seen why regulators are looking at the issue.

Again, there is no indication yet of how regulators will seek to deal with the matter, assuming they will. Whatever is finally decided authors, along with everyone else, will find themselves impacted in one way or another. Advertising is a primary issue for indie authors therefore, for those who have the resources to invest in Google advertising, the potential for the service to be reduced or even broken up may present some issues. In addition, for those who use publishing services that also connect with Google Play and/or Google Play Books the potential for not having all its apps widely available could limit a book’s visibility.

Conclusion

The above is not intended to be scaremongering. It has simply been shared to keep authors aware of potential changes and consequent issues.

These investigations usually take a long time to be processed and therefore changes may not occur for a while. However, there are occasions when matters reach a resolution quicker than expected. Authors should keep an open eye.

If considered relevant to the authoring world, and if it is noticed, further, appropriate, information will be published here.


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